Today’s Breakfast Brief looks at crop progress in both the US and South America, in addition to changing trade winds in the world of wheat, especially American winter wheat.
(If you’re looking for futures market price, please scroll to the bottom of the Breakfast Brief)
“If human beings had genuine courage, they’d wear their costumes every day of the year, not just on Halloween.”
– Douglas Coupland (Canadian author)
Ranking Crops, Year-Over-Year
Grain markets Tuesday are quietly mixed due to the lack of bullish headlines.
Yesterday’s USDA crop progress report stated that the pace of the U.S. corn harvest is well behind normal.  Farmers have combined just 54% of the crop thus far, well behind the five-year average of 72%.
For soybeans, farmers have harvested 83% of the U.S. crop, just 1 point behind the 5-year average.
For winter wheat seeding, the fall campaign is 84% complete. This figure is slightly behind the market’s expectations and the five-year average off 87%.
It is worth mentioning that 52% of the winter wheat crops is rated good-to-excellent. A year ago, it was 58%.
Many analysts consider this year-over-year difference to be bullish.  We’ll dig into the winter wheat complex a little later
In the meantime, as Garrett mentioned in Grain Markets Today, wheat prices continue to face pressures from increasing global supply.
Broader Market Factors
Oil prices are on the move again today.
The WTI crude price today is trading at multi-month highs near $55 USD/barrel. Brent crude hit a two-year high yesterday.
The recent price surge is largely due to Saudi Arabia and Russia considering the extension of production cuts currently scheduled through March 2018.
Another key focus today is the U.S. Dollar. The Federal Reserve will hold its second-to-last annual meeting on monetary policy over the next two days. Although markets do not expect a rate hike this week, traders are looking clues on the probability of a hike in December and a few more in 2018.
At this point, the entire market is expecting interest rates to go up after the December Fed meeting. Literally, the CME FedWatch Tool indicates a 98.2% probability that the Fed will hike its benchmark rate on Dec. 13. 
South American Planting
In Argentina, corn farmers have planted about 34% of their crop so far this season.
That figure is five points below last year’s pace. Soybean seeding is also starting in a few places around Argentina: nearly 2% of fields have been seeded versus the five-year average of 3% by now.
In Brazil, nearly one-third of the soybean crop has now been planted.
That’s in line with the five-year average but still behind last year’s pace of 41% seeded by now, according to AgRural. 
Regionally-speaking though, there’s still some disparity in planting pace. The South is the furthest advanced whereas Goais, the fourth-largest soybean producing state, has only got 6% of their crop seeded.
Usually, they have 28% in the ground by now.
Thanks to the delay in planting, not only does it impact when the crop may get harvested, but also when the second corn crop can get seeded.
Most analysts are expecting the area for the second corn crop (AKA safrinha crop) to be lower, thanks to the expected delay.
On the weather front, normal-to-above-normal rainfall is expected for northern and central Brazil through the weekend. In some parts of northern Brazil (where the rains are certainly needed), 1.5 to 4 inches is expected to fall.
International Wheat Trade Getting Noisier?
Low wheat prices are spurring some demand around the globe.
Ethiopia has doubled its latest tender from 200,000 MT to 400,000 MT.
Further, Saudi Arabia bought 484,000 MT of wheat at delivered price of $221.50 USD/metric tonne (or $6 USD and $7.70 CAD per bushel)
The USDA’s attaché in Mexico says that the country is starting to diversify its grain procurement game. 
Mexican millers are looking more into Argentina for supplies, already having bought one 30,000-tonne load (which was technically the first ever).
There’s also buzz that Mexico is looking into sourcing wheat from Germany, Poland, and Australia.  On a FOB-port basis, it’s worth comparing some low-protein options in the world:
– Argentina: $185 per metric tonne ($5 USD or $6.45 CAD per bushel)
– Black Sea: $178 per metric tonne ($4.85 USD or $6.21 CAD per bushel)
– Australia: $210 per metric tonne ($5.70 USD or $7.35 CAD per bushel)
– Germany: $198 per metric tonne ($5.40 USD or $6.90 CAD per bushel)
– America: $214 per metric tonne ($5.80 USD or $7.45 per bushel)
For American FOB port wheat prices, that’s out of Gulf of Mexico positions, so the freight costs to ship to Mexico are minimal.
Keep in mind that there are distinct concerns about the size of the Australian wheat crop and the quality of the crop coming off in Argentina.
It comes as no surprise then that the USDA’s attaché in Buenos Aires just cut its estimate of Argentina’s wheat exports to 10.8 million tonnes.  That’s a 2.2 million-tonne drop from the record that was expected.
Comparably, the USDA’s official forecast for Argentine wheat exports is at 11.5 million tonnes. The International Grains Council is at 10.9 million tonnes.
Regardless, Mexico’s openness about sourcing elsewhere comes on the heels of some deteriorating trade relations between the U.S. and Mexico. Whether or not NAFTA surviving impacts grain trade remains to be seen.
US Winter Wheat Acres
Back in the United States, the International Grains Council is forecasting total US wheat acreage for the 2018/19 crop to be lowest on record at 46 million acres. 
Given where winter wheat prices are, there isn’t a whole bunch of incentive for American farmers to expand winter wheat acreage.
Futures International is forecasting just 32.6 million acres of winter wheat planted for the 2018/19 crop. 
However, with prices of other crops also low, there doesn’t appear to be much incentive anywhere else.
We did touch on last week though how there are indeed buyers of crops like American oats if you’re diversifying your crop rotation.
Extending on that, over the weekend Garrett dug into the make-up of the North American oats game.
It’s worth a read if you’re already an oat producer (or even if you’re thinking about becoming one).
At 7:20 AM CDT in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.2844 CAD, $1 CAD = $0.7786 USD)
Dec Corn: -0.5¢ (-0.15%) to $3.483 USD or $4.473 CAD
Jan Soybeans: +1.5¢ (+0.15%) to $9.86 USD or $12.664 CAD
Dec Soybean Meal (per short ton): +$1.30 (+0.4%) to $313.60 USD or $402.77 CAD
Dec Soybean Oil (cents per lbs): -0.15¢ (-0.45%) to 34.53¢ USD or 44.35¢ CAD
Dec Oats: +2.8¢ (+1.05%) to $2.66 USD or $3.416 CAD
Dec Wheat (Chicago): -0.3¢ (-0.05%) to $4.245 USD or $5.452 CAD
Dec Wheat (Kansas City): +0.5¢ (+0.1%) to $4.223 USD or $5.423 CAD
Dec Wheat (Minneapolis): +0.3¢ (+0.05%) to $6.188 USD or $7.947 CAD
Jan Canola: +1.8¢/bu / +$0.80/MT (+0.15%) to $9.142/bu / $403.08/MT USD or $11.741/bu / $517.70/MT CAD
COMMODITY TRADING INVOLVES RISK AND MAY NOT BE SUITABLE FOR ALL RECIPIENTS OF THIS POST. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this email and basic data from which they are derived are believed to be reliable, but cannot be guaranteed due to uncertainty about future events and complexities surrounding commodity markets. Those acting on the information are responsible for their own actions.